British apple growers struggling with soaring energy and labour costs have secured cost price increases of less than 1% in the past year, despite shelf-edge prices rising by as much as 46%.
ONS data shows the price of the cheapest apples in supermarkets increased by 17% between September 2021 and September 2022.
Over the course of 2022, according to research by British Apples & Pears, growers received an average return of 0.8% – and the trade body has reported that orders for 150,000 new apple and pear trees have been cancelled amid warnings that the UK apple and pear industry is “seriously in doubt”.
Up to date research from The Grocer shows the average cost of the full range of 119 apple SKUs sold by the traditional big four, the discounters and Waitrose is up 5.8% in the past year [Assosia, w/b 17 April 2023 vs 25 April 2022], with British apples seeing some of the steepest hikes. This was seven times higher than the 0.8% increase in grower returns.
And average on-shelf apple prices have risen by as much as 75p per pack of apples in the traditional big four, Aldi, Lidl and Waitrose, analysis of the Assosia data revealed.
A Rosedene Farms Gala Apples six-pack from Tesco saw the most significant increase, with its price jumping by 46.3% during the past year, from 95p to £1.39, the Assosia data showed.
This was followed by an Aldi Nature’s Pick Best of British Apples six-pack, which rose by 33.6%, from £1.19 to £1.59. A Tesco Rosedene Farms Braeburn Apples six-pack saw the third-highest price hike, up by 32.4% from £1.05 to £1.39.
Out of the 119 apple lines sold by the retailers and available both now and a year ago, 15 had seen prices rise by more than 20% in the year to 17 April. Some 59 lines saw price hikes of more than 5%.
‘No one is making money’
It comes as research for the NFU by Promar last November revealed production costs had increased by 23% from November 2021 to November 2022. Separate analysis conducted by agricultural consultancy Andersons and comissioned by BAP revealed it now costs £1.26 to produce a kilo of British apples.
“I can’t think of a single apple grower that is making money,” said British Apples & Pears executive chair Ali Capper. “The costs of labour, storage, haulage, tree planting and orchard maintenance have all increased. What hasn’t increased is the return to growers.
“UK apple growing just isn’t profitable at the moment. In fact, for most it’s loss making,” she added.
In January, BAP revealed that a third of 480,000 new trees expected to be planted had been cancelled by growers due to rising costs which Capper warned would lead to orchard decline.
Apple and pear producers expressed concern about the future of current orchards in anonymous comments left on the BAP survey. One grower said: “We have pruned them [fruit trees], but unless something miraculous happens, we shall … mothball the orchards whilst we decide their eventual fate.”
Another said without “increase in net price” they may get to “a point where [we] cannot carry on”.
Warnings over the impact of low returns now stretch back almost a year. Last May, apple growers warned that production costs “must be absorbed” in order to keep them in business and called for an 18% price increase as a minimum, the equivalent of a 15p increase to £1.
Labour costs had increased by 242% since 1999, now accounting for almost 40% of production costs for growers. Meanwhile, electricity had doubled and container costs had risen by between 2,000% and 3,000%.
”We need to see specific government support to address energy costs and labour shortages, and we urgently need fairer returns for growers from UK supermarkets to ensure the future of the British apple industry,” said Capper this week.
In response, Aldi told The Grocer percentage calculations on inflation rates disproportionately affected lower-priced supermarkets and stressed it was consistently the lowest-price supermarket in the UK.
Meanwhile, Tesco said the majority of apples it sold had remained largely stable in price and the 0.8% increase in average returns cited by BAP was significantly lower than the pay hike growers had received from the retailer.
Asda
It comes as the most recent monthly research by BAP has laid bare the divergence in the supermarket ranging of British apples.
The organisation’s latest analysis of the market, published at the end of March, revealed Asda has consistently sold a far lower proportion of British apples when compared to its grocery market share.
In February 2023, despite holding a general grocery market share of 14.3%, the retailer stocked just 6.3% of British apples across its estate.
Capper suggested this was down to the retailer having a different management structure to its rivals, while adding stocking British “doesn’t seem to matter to them”. However, she did acknowledge the retailer had improved its share of British apples somewhat in recent months.
Aldi is now the best supporting retailer of the British apples sector. It topped the table, stocking 22.1% of all British apples sold, equivalent to 3,779 tonnes, despite only holding 9.4% of market share in February.
According to Capper Aldi and Lidl were “neck and neck in overperformance” as Lidl had also more than doubled the proportion of British apples sold compared with its market share.
“Our focus is to continue providing ‘affordable sustainability’, which means offering customers great value for money, great quality of produce and consistent availability,” said an Aldi spokeswoman.
“British farmers are intrinsically aligned to these priorities, and through long-term partnerships, we can keep costs low and deliver high-quality produce for our customers.”
Tesco and Sainsbury’s were doing a “reasonable job”, said Capper, pointing to the second and third place positions for two of the largest retailers, selling 3,553 and 2,517 tonnes of British apples in February respectively.
Asda was approached for comment.
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